Sky News business editor Michael Wilson

No crisis of course, but was that number 10 meeting between the PM and Britain's leading lenders about, and what could it achieve? How can the credit crunch, which is more powerful than any government institution be solved over breakfast?

Well, obviously not. But, according to the spin, it looks as though the banks, for their part would have been asking for two things. First, easier borrowing arrangements within the interbank system - an ability to use lower grade mortgages as collateral for what they lend to each other, and a further injection of Bank of England cash. So far the Bank has made £50bn available.

Second, institutional investors have also, unsurprisingly, lost their appetite for investing in mortgages since the sub-prime crisis. That's helped stifle the mortgage market - and so the banks would like the Bank of England to step in to guarantee new mortgage funding.

Undoubtedly the interbank system needs a big cash injection, but I rather hope something else happened. I hope that the lenders at last decided to come clean with each other about their losses and their exposure to the sub-prime crisis. That might help with the one thing in all this that has no price. Trust.

I also hope that they said that far from the taxpayers footing the bill for all this stupidity, the banks' shareholders, who so far only suffered a capital loss from their shares, would feel some pain. Their dividends have been better than ever, while the banking industry has failed in its debt crisis.

I doubt it, though.

But I have one more wish. That after all this, we all learn how to save for a rainy day. Fat chance?

Comments

[Elizabeth Davies Cape Town 15 Apr 2008 20:21:27]

Brown said there would be no more spin...for someone who said there would be more transparency he can certainly tell a good "yarn". Who is Mr Brown bluffing, breakfast at Downing Street must have been hard to swallow.
Brown believes there is no financial crisis, it's all going to be fine and dandy in the future. Remember Mr Brown has a vision for Britain, he just forgot to mention it was "long tunnel" vision. By the time this all comes right he will be long gone.

[Ian Ashworth Leyland 15 Apr 2008 17:05:03]

Banks make millions as do supermarkets - RBS and Tesco about 13M between them both recording increases of around 10% on the back of increased prices and reduced costs due to job reductions and cheap labour .In a climate of everyone having to accept pay rises of less than inflation true rate of which is around 8% then Gordon Brown should tax these companies on these excessive profits and put this back into economy allowing lower taxation for the working class .The dividends are now far higher than high street investments, in fairly secure sector given their cartel and these in the main go to City institutions or fat cat non performing executives .The government is so far away from reality not even the fat cat bosses bothered to turn up to his breakfast !

[Khalid 15 Apr 2008 12:23:19]

Sir
Thus fars as Banks and Building Societies, if they went about to gain public sympathy, then I'm afraid they not only know the true cost of the [Enigma] they creat but appear to be in what is called cloud cuckoo land.
Mortgages, on the other hand not only provide the family home, or there abouts, but also fund the many a balance sheet, allowing shareholders to further enjoy the fruits of their labour.
Ironically, Banks want assitance form the BoE over breakfast, but somehow fail to release figures surroundign how many breakfasts' they have destroyed, over what can ponly be amounted to pittance?
Therafter, homeowners need to make a stern choice, what is it you want, a roof over you head or luxury holidays in a car you can't sleep in? Or are you going to continually play the keep up with the jones games?
So as fault lies on both side, homeowners can make life simple by living within their means, whilst Banks etc can ensure they dont rush to re-possess and economic job pressures take time to re-balance. Having said that, [Sacral Nirvana] will provide for future stability if only banks passed on the lowering rates and learn from consumer retention practices.
But as you say, Fat Chance! (oh by the way, wicked glasses)